U.S. attorney takes no action against Scruggs

District judge determined to prosecute for contempt
THE ASSOCIATED PRESS
Posted on Thu, Jul. 26, 2007

BIRMINGHAM, Ala. --The U.S. attorney in Birmingham on Wednesday declined a federal judge's request to prosecute prominent Mississippi attorney Richard F. "Dickie" Scruggs and his law firm for criminal contempt in a Hurricane Katrina insurance dispute.

U.S. Attorney Alice Martin said in the letter to U.S. District Judge William M. Acker Jr. "following a serious and thorough review of the facts surrounding this indirect criminal contempt, I respectfully decline to prosecute Mr. Scruggs or his firm."

In his June 15 request, Acker said he would appoint another attorney to handle the prosecution if Martin declined the court's request.

Acker's office did not immediately return a phone call seeking comment Wednesday afternoon.

A spokeswoman for Martin's office, Jill Ellis, said the U.S. attorney had no further comment beyond the letter.

Scruggs, a highly successful plaintiffs' lawyer, is suing State Farm on behalf of hundreds of Mississippi residents.

Scruggs could not be reached for comment Wednesday afternoon, but Zach Scruggs, his son and law partner in Oxford, said he received a copy of Martin's letter.

"We believe that the U.S. attorney's letter says all that needs to be said about this matter, and it would be inappropriate for us to say anything else at this time," Zach Scruggs told The Associated Press.

Acker ruled in June that Scruggs "willfully violated" a Dec. 8 preliminary injunction that required him to deliver "all documents" about State Farm Property and Casualty Insurance Co. secretly copied after Katrina by whistle-blowers Cori and Kerri Rigsby.

Acker's ruling came in a suit by E.A. Renfroe and Co. Inc., a claims-adjusting firm that fired the Rigsbys after finding out they had taken internal documents.

Renfroe and Co. worked for State Farm, and the sisters were heavily involved in processing claims for the insurance giant.

Instead of complying with the December injunction, Acker said in the June ruling, Scruggs promptly sent the documents to Mississippi Attorney General Jim Hood's office "for the calculated purpose of ensuring noncompliance with or avoidance" of the injunction.

He said Scruggs' motive seemed clear from the undisputed facts.

"Even after Hood 'voluntarily' sent the documents to counsel for Renfroe at Scruggs's request, Scruggs wrote to Hood requesting another copy of the same documents for himself and ostensibly for the Scruggs Katrina Group," the judge wrote.

At the time, Scruggs called the judge's actions "bizarre" and said his firm had completely complied with the injunction.

The Rigsbys, from Ocean Springs, have admitted copying thousands of pages of records to back up their allegations State Farm wrongly denied claims after Katrina.

The sisters gave the documents to law enforcement agents and Scruggs, who signed them each to a $150,000-a-year consulting contract. The sisters say they made about 15,000 copies - three sets of 5,000 separate records.


Return to A.M. in the Morning! Home